Katherine Manuel, SVP of Innovation at Thomson Reuters, emphasized the importance of unification and a collaborative approach to growth and development in the financial services industry, saying “The speed of financial technological innovation means that big companies and banks have to collaborate with entrepreneurs and academics to keep up with the pace of change. At the same time, startups and academics need the business input to scale, fund and provide relevance in highly regulated markets.”

Collaborative projects will define the next wave of FinTech and for a good reason – they benefit both parties. Innovation labs/joint projects/trials allow corporations to source ideas, the latest technological advancements, international talent and provide a chance to improve banking infrastructure by implementing solutions developed by legacy-free startups.

Startups, in turn, gain an opportunity for priceless feedback from experienced professionals, knowledge and financial support – a way into the big game, simply put. An isolated development path denies these businesses potential mentor/investor exposure as well as an opportunity to improve existing solutions.

Moreover, Chris Myers, the Co-founder and CEO of BodeTree, points out that for startups any other game rather than collaboration is most likely a loss. As Myers explains, “If you’re gambling on FinTech, either as an entrepreneur or an investor, you’d be wise to remember that the bank is the house. You might have a few wins here or there, but in the end, the house always comes out ahead.”

The third wave of FinTech is actually already here as a wide range of institutions are walking hand-in-hand with startups or being involved in some sort of interbank consortiums. As a result, banks are now mostly well armed with the latest technological advancements in partnership with startups and are therefore able to finance deals secured through the more appealing platforms of their FinTech ‘competitors’. Alternative lending is a good example here with flagship deals like BofA & Viewpost, JPMorgan & OnDeck and others.

Professionals from Moody’s are among the experts emphasizing the beneficial outcomes of the ‘third wave’ for the other players in the ecosystem. Tie-ups between marketplace lenders and banks, for example, can benefit small businesses. Most importantly, as Moody’s stated in the official press release, “The partnerships that small business marketplace lenders (MPLs) are forming with banks could help them lower their non-credit costs by cutting customer acquisition costs and funding costs. <…> Banks could benefit from the tie-ups by increasing their lending volumes and speeding up their review and approval process for clients.”

The benefits of collaborative work in the financial services industry are not limited to businesses – they shed the light on underbanked population and facilitate the inclusive growth of economies. Startups that decide to ‘travel’ alone and fight their way into the market may soon face rivalry from former colleagues that have chosen to lean on powerful supporters to catalyze their growth and development. Even in case they reach a certain level of success, the market is not stretchable and limits may be reached sooner for lone warriors than for startups ready to work with the system.